Purdue Pharma LP, the maker of OxyContin, and its owners, the Sacklers, will pay Oklahoma $270 million in a settlement agreement to resolve its claims with the state, with the bulk of that money going to a program for addiction research and treatment, the state’s attorney general announced Tuesday.
The payment agreement comes just two months before what would have been a closely-watched jury trial in Cleveland County, where there would have been cameras in the courtroom.
Nearly $200 million will go to establish a foundation that will provide funding for the Oklahoma State University Center for Health Sciences Center for Wellness & Recovery, which will be used to treat and research addiction on a nationwide level.
“This begins a new chapter for those struggling with addiction,” Attorney General Mike Hunter said at a news conference at the OSU Center for Health Sciences on Tuesday afternoon.
There are still eight other drug manufacturers, as well as Johnson & Johnson and Teva Pharmaceuticals USA Inc., named in Oklahoma’s lawsuit. The case is scheduled to go to jury trial in Cleveland County District Court on May 28.
Asked whether the Purdue settlement could lead the way for more defendants to settle, Hunter said though his team is ready to go to trial, there is still court-ordered mediation required in the meantime.
“As President Kennedy said, never negotiate out of fear, but never fear to negotiate,” Hunter said. “So, we’re ready to talk, but we’re also ready to go to trial.”
Oklahoma’s lawsuit, filed by Hunter in 2017, accused 18 opioid manufacturing companies and corporate subsidies of knowingly fueling the state’s opioid crisis with an aggressive marketing campaign that made false and dangerous claims about the dangers of the drugs.
District Judge Thad Balkman approved the settlement agreement with Purdue on Tuesday morning.
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Hunter said in order for the state to reach an agreement, he had to consider the fact that Purdue was exploring Chapter 11 bankruptcy. He said his team has gone to great lengths to ensure the settlement is “bankruptcy-proof.”
“We’ve gotten a commitment that they (Purdue) are not filing bankruptcy in the near term. … We’ve gone to great lengths to ensure that it’s not at risk in the event Purdue files bankruptcy,” Hunter said.
As part of the settlement agreement, Purdue Pharma maintained the state’s claims against it were false. The company issued a press release on Tuesday referring to the settlement as an “agreement … to advance the treatment of addiction.”
“Purdue has a long history of working to address the problem of prescription opioid abuse and diversion,” said Dr. Craig Landau, president and CEO of Purdue Pharma in a news release.
“We see this agreement with Oklahoma as an extension of our commitment to help drive solutions to the opioid addiction crisis, and we pledge Purdue’s ongoing support to the National Center and the life-saving work it will do for generations to come.”
The Sacklers will contribute $75 million over five years to the state’s foundation.
“We have profound compassion for those who are affected by addiction,” a spokesperson for the Sacklers said in a news release. “The National Center will provide immediate assistance to Oklahomans and individuals nationwide who need these services, and our support is in keeping with our family’s continuing commitment to making meaningful contributions to solutions that save lives.”
The OSU for Health Sciences established the Center for Wellness & Recovery in November 2017, which aims to combat substance use disorders through treatment, education and research.
The center opened an addiction medicine clinic in Tulsa in September 2018. It also routinely holds Buprenorphine waiver training classes for doctors. Buprenorphine is a medication typically used to treat opioid addiction and can help manage withdrawal symptoms. Prescribers who want to treat patients for addiction with the drug must apply for a special federal waiver.
OSU will initially receive $102.5 million, and beginning Jan. 1, 2020, the center will annually $15 million over a five-year period. During that same time, Purdue will supply the center with buprenorphine, which is valued at $20 million.
The National Center for Addiction Studies and Treatment, which will be housed in the OSU Center for Wellness & Recovery, will receive and manage the settlement money and be overseen by a national scientific advisory board, according to the consent judgment.
The remainder of the settlement will be divvied up across the state.
An additional $12.5 million will go to Oklahoma cities and counties in an effort to address the opioid epidemic.
Another $60 million is set to go toward state’s litigation costs and attorneys fees.
As part of the settlement agreement, Purdue is not allowed to promote opioids to health care providers in Oklahoma, which includes employing or contracting with sales representatives.
The Attorney General’s office contracted with the Whitten Burrage Law Firm to help spearhead the state’s case. The lead attorneys are Michael Burrage, a former federal judge, and Reggie Whitten, whose son died after abusing prescription drugs.
The attorneys’ contract stipulates they will be paid only if the state recovers damages from the opioid companies, and how much they get depends on how much the state recovers. For example, the contract allows attorneys to keep 10 percent of any amount over $500 million.
